By using website you agree to our use of cookies as described in our cookie policy. Learn More

TDWI Upside - Where Data Means Business

Before Hiring a Chief Analytics Officer, Answer These 3 Questions

These three questions can help sort out whether you want or really need a CAO in your organization.

Today a company's data is arguably more valuable than it's ever been before. As a result, many businesses are looking internally to define roles that can help put their data to good use.

By the end of the year, spending on big data initiatives is projected to exceed $57 billion and the business intelligence and analytics market is expected to rake in over $18 billion. Clearly there are major financial implications for an organization's ability to crunch their numbers.

Enter the chief analytics officer (CAO), also known as the chief data officer (CDO), a role that IBM has called "the new hero of analytics and big data." The duties of this growing C-level role are three-fold:

  • Find opportunities to monetize data
  • Use enterprise data to prioritize internal improvements
  • Discover new, creative opportunities to leverage data

For Further Reading:

5 Minutes with a Chief Analytics Officer: Michael O'Connell of TIBCO Software

Time to Level Up: The Evolving Role of the Chief Data Officer

3 Steps for Establishing Your Chief Data Office the Right Way

However, the emergence of this role begs a key question: Is it truly necessary for modern companies to appoint a chief analytics officer, or is the position just the result of the current buzz about big data?

Even if your organization is 100 percent invested in deriving the most value possible from your data, is a CAO truly an essential part of the equation?

With so many voices weighing in on the debate over the necessity of a chief analytics officer, organizations must assess their wants versus their needs. Here are three questions every enterprise should ask to help determine their need for a CAO.

Question 1: Can someone else in your company pick up the slack?

When it comes to your potential "need" for a CAO, the obvious elephant in the room is whether an existing C-level executive can take over the duties of an analytics officer.

Mark Gambill, the CMO of MicroStrategy, describes the role of CAO as a bridge that connects leaders who need real-time information and the CIO or IT departments. His take is that the position was "born out of frustration" over the disconnect between operational and IT roles.

"In a perfect world," he says, "functional business leaders (Sales Ops, HR, marketing) want to be the masters of their information."

In other words, the CAO works to make sense of data on behalf of entire teams where it'd otherwise get lost in translation. Some firms can clearly thrive without a CAO, but the role certainly lightens the load for those in IT.

Of course, an internal data expert that's already familiar with the lay of the land could also be given the reins of the role without a full-blown promotion to C-level. However, the purpose of a CAO is to streamline both operations and IT, not disrupt them. If promoting someone internally means throwing a wrench into the rest of your organization, bringing in someone new may make more sense.

Question 2: What's driving your need for a CAO?

Arguably the most pressing question for organizations to assess is exactly why they feel that having a CAO would be so beneficial in the first place.

If you want your company's less-technical management to move away from making decisions based on gut feelings and toward data-driven strategies, a CAO can certainly be a valuable asset. As long as the role is justified based on your company's goals and budget, exploring the possibility of a new hire makes sense.

However, critics such as Kristian Hammond, the chief scientist at Narrative Science, make the case against designated analytics and intelligence officers. Hammond argues that companies seem more eager to bring on new C-level roles than actually solve problems or improve products.

It's true that modern companies can fall prey to a sort of "shiny new toy" syndrome when it comes to roles such as a CAO. They're new. They're fresh. Meanwhile, industry forecasts estimating that 90 percent of large organizations will have a CAO by 2019 might send companies scrambling to find someone to fill the position without a second thought.

Again, it's all about assessing wants versus needs. Just as analytics officers have their skeptics, they also have their champions. For Dr. Zhongcai Zhang, a CAO himself at New York Community Bancorp, the democratization of data is central to why the role matters so much.

Zhang asserts that better analytics means better business. The more in tune CEOs and other team members are with the KPIs of an organization, the more integral and important analytics become. It's a snowball effect. "Nowadays one would rarely find any job out there without the need to rely on data or certain metrics," he says. "For virtually all organizations, making data accessible at all levels is essential."

In other words, the process of making data more actionable throughout an enterprise is a win-win for everyone involved. The appointment of a CAO is one way to work toward making that accessibility a reality.

Question 3: What are you looking for in a CAO, anyway?

Any company exploring the possibility of hiring a CAO needs to understand what the ideal person for the role looks like in terms of their strengths, background, and experience. Finding the balance between business knowledge and technology is often easier said than done. Even if you don't have anyone in-house who can execute CAO-like duties, and even if your motivations for recruiting are sound, you're still probably better off holding out for the right talent.

Amir Orad, the CEO of business intelligence platform Sisense, stresses the need for someone who can simplify data on behalf of an entire organization without turning all existing processes upside down.

"You need someone who can lead the adoption of analytics and intelligence throughout the firm," Orad says. "You don't want this person coming in to create a silo around business intelligence, nor should this person attempt to retrain the employee base to 'learn' analytics."

Because the position is still relatively young, finding the right fit may require some digging. Given the rapid rise of artificial intelligence, someone well-versed in AI is a must. "You need very special people with a great understanding of AI," Orad asserts, "but also the perception and skill to translate the language of your business."

Ideally, if you decide you need one, you'll find a CAO candidate who's worked on both sides of the fence, understanding the responsibilities of an effective executive while still having the technical knowhow when it comes to analytics. Rather than force the right fit, companies should focus on finding candidates with the necessary experience for their particular organization.

The Ongoing Evolution of the CAO

The CAO debate isn't a black and white issue; the role is still evolving. Once you establish mechanisms that empower team members to track their own metrics and derive their own insights, the CAO will have new strategic "discovery enablement" initiatives to take on.

There's no denying the benefits of having a solution on deck to make data more accessible across an organization. Whether it's in the form of a CAO, an on-demand consultant, or an especially intuitive business intelligence platform, it all comes down to enabling users to find their own data-driven insights.


TDWI Membership

Accelerate Your Projects,
and Your Career

TDWI Members have access to exclusive research reports, publications, communities and training.

Individual, Student, and Team memberships available.